The government had planned to pump 11 million tons of carbon dioxide in 2011 from a Royal Dutch Shell oil refinery into two depleted gas fields 1.2 miles under Barendrecht, a town of 43,000 people.

But Economic Affairs Minister Maxime Verhagen said the plan "is no longer possible in the short term" because it has already been delayed for three years and the town's residents do not support it.

Homeowners have fiercely objected to the proposal and worry that housing prices will plummet because potential buyers will fear CO2 leaks. The storage technology of the gas is still in its experimental stages.

Verhagen said in a letter to parliament that storing carbon dioxide would remain part of the Dutch government's strategy to combat climate change.

"Stopping in Barendrecht does not mean the end of carbon dioxide storage in the Netherlands," he said.

The Netherlands already stores carbon dioxide under the North Sea. Verhagen said he would also begin talks with the North Holland province about the possibility of building another underground storage facility.

Protesters who had fought the Barendrecht scheme could not immediately be reached for comment.

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